Hector Beverages Pvt Ltd, the company behind the popular brand Paper Boat, announced an impressive achievement by surpassing the INR 600 crore revenue milestone in the fiscal year ending March 2023. The credibility of this projection is further strengthened by the fact that the company, backed by Sequoia, had already exceeded INR 330 crore in revenue in the previous fiscal year (FY22) while also making progress in reducing losses.
According to the annual financial statements filed with the Registrar of Companies, Paper Boat experienced a remarkable 35.6% surge in revenue from operations, reaching INR 330 crore in FY22 compared to INR 243.3 crore in FY21.
Paper Boat, established by former Coca-Cola executives Neeraj Kakkar and Niraj Biyani, specializes in the sale of packaged juices, coconut water, traditional Indian snacks, and dry fruits. The revenue generated from the sale of juices contributed significantly, representing 95% of the operating revenue. In FY22, the juice segment witnessed a remarkable surge of 35.5%, amounting to INR 313.6 crore. The remaining income was derived from food items, which experienced a notable increase of 37.8% to reach INR 16.4 crore in FY22.
In terms of expenses, the cost of procurement accounted for 62.5% of the total expenditures, experiencing a significant surge of 32.8% to reach INR 240.1 crore in FY22. Additionally, employee benefit expenses grew by 28.1% to INR 41.9 crore during the same period.
In FY22, Paper Boat witnessed a substantial increase in its advertisement cum selling costs and job work charges, rising by 52.4% and 18.6% to INR 44.2 crore and INR 8.3 crore, respectively. Consequently, the company’s overall expenditure surged by 35% to reach INR 384.1 crore during FY22.
Despite the growth in expenses, the company successfully maintained a strong hold on its bottom line.
Paper Boat made significant progress in reducing its losses, with a decrease of 17% to INR 53 crore in FY22 compared to INR 63.7 crore in FY21. This improvement builds upon the previous year’s success, where the company witnessed a substantial decline of 36.5% in losses during FY21, down to INR 100.3 crore from INR 63.7 crore in FY20.
During FY22, PaperBoat faced challenging financial performance metrics. The Return on Capital Employed (ROCE) and EBITDA margin were recorded at -534.4% and -13.13% respectively. These figures indicate significant losses and a negative profitability trend for the company. Furthermore, on a unit level, PaperBoat spent INR 1.16 to generate a single unit of operating revenue, highlighting the need for cost optimization and efficiency improvements within the organization.
Having established itself in the market for over a decade, PaperBoat has been successfully selling its packaged juices. Notably, the company has displayed a consistent reduction in losses over the past few financial years, which is an encouraging indication for this direct-to-consumer (D2C) brand. With a recent round of funding completed last year, it is evident that PaperBoat is determined to expand its business further. Although the company claims to have generated revenue exceeding INR 600 crore for the financial year ending in March 2023, only time will tell if they have also managed to continue reducing their losses while pursuing their ambitious growth plans.
